Jacolien Barnard NO and Another v National Consumer Tribunal and Another

The National Credit Regulator (NCR) investigated CMR Group (Pty) Ltd for operating a 'Pawn your car and still drive it' scheme that allegedly contravened the National Credit Act 34 of 2005 (NCA). The scheme involved consumers borrowing against their fully paid motor vehicles, transferring ownership to CMR, and renting the vehicles back. The NCR alleged contraventions including excessive interest, failure to conduct affordability assessments, and prohibited charges. CMR filed an answering affidavit conceding to the orders if found to have engaged in prohibited conduct. Before the Tribunal hearing scheduled for 30 July 2019, CMR was placed in voluntary liquidation on 14 February 2019, and the applicants were appointed as provisional liquidators. The liquidators were notified of the hearing, and Ms Barnard confirmed attendance on 24 July 2019, but neither CMR nor the liquidators appeared at the hearing. The Tribunal proceeded in their absence under rule 24 of the Tribunal Rules and issued orders on 12 August 2019 that included cancellation of CMR's registration, declaring all credit agreements reckless, setting aside consumer obligations, and ordering reimbursement to consumers. The liquidators appealed to the High Court under s 148(2)(b) of the NCA.

• Whether the High Court had jurisdiction to entertain an appeal under s 148(2)(b) of the NCA where the appellants did not participate in the hearing before the National Consumer Tribunal
• Whether 'participation in a hearing' as required by s 148(2)(b) of the NCA requires physical attendance at the hearing or can be satisfied by filing an answering affidavit
• Whether the liquidators should have applied for rescission under s 165 of the NCA instead of appealing
• Whether the liquidators should have been joined as necessary parties to the proceedings before the Tribunal following the liquidation of CMR
• Whether the Tribunal had power to issue orders against liquidators who were not joined as parties
• Whether the Tribunal orders conflicted with the insolvency regime under the Companies Act 61 of 1973

Majority order: (1) The applicants' failure to timeously apply for leave to appeal is condoned. (2) The application for leave to appeal is struck off the roll. (3) The applicants are ordered to pay costs, including those of two counsel where so employed. The dissenting judges would have granted leave to appeal, upheld the appeal, set aside the High Court order, set aside the Tribunal order, and stayed the proceedings before the Tribunal for three months pending joinder of the liquidators.

Participation in a hearing before the National Consumer Tribunal, as required by s 148(2)(b) of the NCA for purposes of appealing to the High Court, requires actual physical participation by a party or their legal representative at the hearing. Filing an answering affidavit or notifying the Tribunal of an intention to attend does not constitute participation in the hearing. This participation requirement is jurisdictional - without it, the High Court has no jurisdiction to entertain an appeal under s 148(2)(b) of the NCA. Where a party fails to participate in a Tribunal hearing and an order is made in their absence, the appropriate remedy is to apply for rescission under s 165 of the NCA, which provides for rescission of orders erroneously granted in the absence of a party, rather than to appeal under s 148(2)(b).

The majority judgment treated the application as one for leave to appeal under s 16(1)(a) of the Superior Courts Act 10 of 2013 rather than special leave under s 17, relying on National Credit Regulator v Lewis Stores (Pty) Ltd which held that decisions of the Tribunal are administrative decisions rather than court judgments. The majority also addressed whether liquidators should have been joined, finding that s 359 of the Companies Act 61 of 1973 only requires notice to liquidators and does not impose an obligation on creditors to join liquidators in proceedings commenced before liquidation. The dissenting judgment emphasized that liquidators as necessary parties have a direct and substantial interest that entitles them to be joined, and that the Tribunal's orders may have created preferences contrary to insolvency law by effectively 'attaching' company assets and preferring certain creditors over others in contravention of s 359(1)(b) of the 1973 Companies Act.

This case provides important guidance on the jurisdictional requirements for appealing decisions of the National Consumer Tribunal under s 148(2)(b) of the NCA. It establishes that physical participation in the hearing before the Tribunal is a mandatory jurisdictional prerequisite for noting an appeal to the High Court. The judgment clarifies that parties who did not participate in the Tribunal hearing must pursue rescission under s 165 of the NCA rather than appeal. The dissenting judgment raises important issues about the intersection between the NCA and insolvency law, particularly regarding the necessity of joining liquidators as parties where orders will affect their statutory duties and the insolvency regime. The case highlights tensions between consumer protection objectives under the NCA and the collective creditor protection principles of insolvency law.